- The report does not include any quantitative models or factor construction details related to financial engineering or quantitative analysis [1][3][4] - The content primarily focuses on analyzing the impact of historical oil price shocks on asset pricing and macroeconomic variables, as well as the implications for asset allocation under different policy responses [4][7][22] - The report identifies four market reaction phases to oil price shocks: panic trading, reversal trading, stagflation expectation trading, and reality trading, emphasizing that the key determinant of asset performance is whether high oil prices persist and influence inflation and policy constraints [14][17][36] - Historical examples of oil price shocks, such as the 1973 oil crisis, 1978 oil crisis, and 2022 Russia-Ukraine conflict, are analyzed to understand their impact on inflation, policy, and asset performance, with a focus on distinguishing stagflationary scenarios from non-stagflationary ones [10][22][31] - The report highlights that in stagflationary environments, defensive and upstream sectors like energy, utilities, and healthcare tend to outperform, while growth and liquidity-sensitive sectors such as real estate, technology, and industrials face pressure [23][26][29] - Non-stagflationary oil price shocks, characterized by limited transmission to inflation and policy, show less systemic impact on equity markets, with recovery patterns varying across regions and styles [28][31][36] - The report concludes that the persistence of high oil prices and their transmission to inflation and policy are critical variables to monitor, alongside the starting valuation levels of equity markets, which influence their sensitivity to stagflationary pressures [34][35][36]

Group 1: Financial Trends - In 2025, the balance of bank wealth management products reached 33.3 trillion yuan, with a year-on-year growth rate of 11.2%[4] - The number of individual investors increased by 17.69 million, a year-on-year growth of 14.3%, reaching a total of 143 million investors[4] - Wealth management funds shifted towards deposits, increasing their allocation to cash and public funds while reducing bond assets[4] Group 2: Product Supply Changes - The scale of fixed-income products reached 32.3 trillion yuan, an increase of 3.2 trillion yuan from the previous year, while cash management products decreased by 0.26 trillion yuan[5] - The proportion of low-risk products fell to 27.9%, while medium-low risk products slightly increased to 67.9%[5] - The share of minimum holding period products increased, while daily open products saw a decline in proportion[5] Group 3: Returns on Wealth Management Products - The average yield of wealth management products dropped to 1.98%, a decrease of 0.67% from the previous year, despite total revenue increasing to 730.3 billion yuan[5] - R1 (low-risk) products saw yields decline from approximately 1.9% to around 1.4%, while R3-R5 products showed an upward trend[5] - "Fixed income plus" products did not outperform pure fixed income, with a yield gap of about 20 basis points at year-end[5]

Investment Rating - The industry rating is "Outperform the Market," indicating that the overall return of the industry is expected to exceed the market benchmark index by more than 5% in the next 6 months [56]. Core Insights - In January 2026, global semiconductor sales reached $82.5 billion, marking a 46.1% increase compared to January 2025 and a 3.7% increase from December 2025 [4][31]. - The semiconductor price increase trend continues, with major foundries planning to raise prices by up to 10% starting in April 2026 due to rising production costs driven by various factors including supply chain disruptions and raw material price hikes [30]. - The domestic manufacturing upgrade is ongoing, with high standards and high-performance material demands expected to be released gradually, indicating a rapid development potential for the new materials industry [4]. Market Overview - The Wind New Materials Index closed at 5900.37 points, up 0.87% week-on-week. Among the six sub-industries, the semiconductor materials index fell by 2.79%, while the carbon fiber index rose by 26.05% [3][11]. - The top five gainers in the week included Ruifeng High Materials (25.52%), Lianrui New Materials (21.33%), and Huate Gas (15.49%) [26][27]. Recent Industry Highlights - The launch of the full-size humanoid robot PEEK by Huaxiang Qiyuan represents a breakthrough in lightweight, high-endurance, and durable applications, reducing the robot's weight by 5.3 kg [4][35]. - Feikai Materials announced plans to invest in a new production base in Anhui, with a total investment of approximately 1 billion yuan, aimed at expanding its semiconductor materials strategy [35][36].

Group 1 - The report indicates a shift towards a "stagflation" trading mode, with high oil prices exacerbating global inflation concerns and liquidity tightening, which suppresses market risk appetite [10][12]. - The overall market experienced a decline of 0.48% during the week, with the ChiNext Index and CSI Dividend leading gains, while CSI 500 and STAR 50 faced losses [2][10]. - The report highlights that the stock-bond yield spread has increased to 0.4%, indicating a divergence in market valuations, with a rising valuation dispersion coefficient [21][22]. Group 2 - Market sentiment has improved, with the sentiment index rising by 2.9% to 47.0, although industry rotation strength has decreased, indicating a preference for small-cap stocks [22][30]. - The report notes a decrease in market volume, with significant bullish stocks in banking, coal, and electric equipment sectors, while steel, non-ferrous metals, and oil and petrochemicals may present alpha opportunities [30][36]. - The average daily trading amount of the Stock Connect decreased by 337.22 billion yuan compared to the previous week, with net inflows of leveraged funds primarily into electric equipment, basic chemicals, and public utilities [36][50]. Group 3 - Industry highlights include Tencent's nationwide installation plan for "Dragon Claw" and the debut of Qianwen AI glasses, indicating a competitive landscape in AI technology [46][47]. - The successful launch of 20 low-orbit satellites for satellite internet marks a significant advancement in China's satellite internet development, which is now included in the national government work report [48]. - The report emphasizes the need to focus on price increases and safety in the context of geopolitical uncertainties, particularly regarding the ongoing conflict in the Middle East [50].

Core Insights - The report highlights the emergence of new investment themes, particularly in the photovoltaic inverter sector, which is showing a right-side breakthrough trend [4][11]. - The report categorizes themes into four main patterns: right-side breakthrough, right-side trend, bottom stabilization, and bottom reversal, providing a structured approach for identifying investment opportunities [8][4]. Group 1: Right-Side Breakthrough - New themes identified include glyphosate, salt, and photovoltaic inverters, indicating strong upward momentum in these sectors [4][11]. - The photovoltaic inverter index has shown a 24% increase over the past 20 days, with a year-to-date (YTD) increase of 33% [11]. Group 2: Right-Side Trend - The photovoltaic inverter and hydropower indices are noted for their right-side trend, suggesting ongoing positive performance in these sectors [4][13]. - The photovoltaic inverter index has a 5-day increase of 9% and a YTD increase of 33% [13]. Group 3: Bottom Stabilization - New themes include liquor, trust, peptide drugs, medical beauty, small base stations, new energy vehicles, and brokerages, indicating potential recovery in these sectors [4][18]. - The liquor index has shown a 5-day increase of 0% and a YTD decrease of 13%, suggesting stabilization despite recent challenges [18]. Group 4: Bottom Reversal - Ongoing themes include animal vaccines, pig industry, innovative drugs, lithium hexafluorophosphate, lithium battery electrolytes, and mobile batteries, indicating potential for recovery [4][20]. - The mobile battery index has shown a 20-day increase of 13%, indicating a strong reversal trend [20].

Report Industry Investment Rating - Not provided Core View - The convertible bond valuation is still in the process of compression, and the adjustment range of high - priced varieties is relatively large. The "de - leveraging" market of convertible bonds may continue [2][4] Summary by Directory 1. Convertible Bond Valuation Compression, Larger Adjustment Range for High - Priced Varieties - In the past week (March 9 - 13), the performance of convertible bonds was worse than that of underlying stocks. The Wind Convertible Bond Underlying Stock Equal - Weighted Index rose slightly by 0.04%, while the CSI Convertible Bond Index and the Wind Convertible Bond Equal - Weighted Index fell by 1.10% and 1.86% respectively. As of March 13, compared with the high points at the end of February and early March, the adjustment range of convertible bonds was greater. The market price median and the 100 - yuan premium rate decreased by 2.28 yuan and 2.13 pct respectively in the past week, and decreased by 5.63 yuan and 5.68 pct respectively compared with the previous high points [3][11] - The Wind Convertible Bond High - Price Index, Medium - Price Index, and Low - Price Index fell by 2.07%, 0.90%, and 0.32% respectively in the past week, and fell by 9.83%, 2.98%, and 1.17% respectively compared with the previous phased high points. High - priced convertible bonds were subject to factors such as forced redemption shocks and high valuations, and the adjustment range was significantly larger than that of medium - and low - priced varieties [12] 2. The "De - leveraging" Market of Convertible Bonds May Continue - From the perspective of the overall market valuation level, the current premium rate may still have some room for adjustment. In the previous two valuation change cycles, the 100 - yuan premium rate of the whole market fell by about 60% of the previous increase during the contraction process, and the adjustment durations were 64 and 35 trading days respectively. In this round of valuation expansion, the 100 - yuan premium rate has risen by 51.9%. As of March 13, the decline in the valuation contraction stage was only 11.9%, less than 40% of the previous increase, and it only took 16 trading days. So, the current adjustment is not sufficient in terms of time and space [20] - For high - priced bonds, if the underlying stocks fail to continue the previous upward trend, the "de - leveraging" market of convertible bonds may continue. The current median premium rate of high - priced convertible bonds is still as high as 20%, which hardly matches the median parity of 140 yuan. The rise of high - priced varieties from January to February 2026 was mainly driven by the "leverage" of convertible bonds. If the upward trend of the underlying stocks is broken, convertible bond assets will inevitably undergo "de - leveraging". If the underlying stocks continue to fall, the price of high - priced bonds may face double pressure of parity decline and valuation contraction. The median parity may fall back to around 130, and the median premium rate may stop falling around 15% [5][22][25]

1. Report Industry Investment Rating No information provided regarding the industry investment rating. 2. Core View of the Report - Supply - side inflation pressure won't change the overall mid - term trend of the bond market. But for long - term interest rates to return to the downward range, the market needs to reach a consensus that inflation won't affect the monetary policy orientation, with the most direct sign being the implementation of reserve requirement ratio cuts and interest rate cuts. Currently, the bond market may remain in a volatile pattern, and it is recommended to maintain a neutral duration for further observation. The risks of medium - short - term and credit bonds are relatively limited [9][77]. 3. Summary According to Relevant Catalogs PPI earliest to turn positive in March, CPI peak may be in May under the benchmark assumption - This week, the bond market adjusted, and the yield curve steepened significantly. The sharp rise in oil prices and the unexpectedly high February CPI and PPI data led to a significant adjustment in long - term interest rates. The February inflation increase was mainly due to the Spring Festival factor. The CPI increase was almost entirely contributed by food, transportation and communication, and education, culture and entertainment. After the Spring Festival, the prices of agricultural products declined, and without considering oil prices, the February CPI increase was not sustainable. The February PPI decline narrowed, mainly driven by the non - ferrous and petrochemical industries, and the transmission of commodity price increases to the downstream was still not smooth [2][13][14]. - Two scenarios for the future development of the Iranian situation were assumed. In both scenarios, PPI is expected to return to around 0 in March, with the peak likely to appear around June. For CPI, under scenario 1, the peak may occur in May, and under scenario 2, the peak may approach 2.5% [25][27]. Inflation's impact on the bond market needs to be transmitted through monetary policy. Currently, for long - term interest rates to return to the downward trend, more explicit monetary policy is needed - Historically, inflation's impact on the bond market needs to be transmitted through monetary policy. In China, low inflation has been a problem for monetary policy, and inflation is not a short - term constraint on monetary easing. In 2019 and 2021, high CPI and PPI did not prevent the central bank from implementing easing policies [30]. - Recently, the central bank's attitude has shown some marginal changes. It no longer mentions that the alleviation of bank interest margin pressure creates space for interest rate cuts, and the Financial Times no longer mentions the possibility of total - volume tools cooperating with wide - fiscal policies. Although the central bank is unlikely to tighten liquidity in the short term, long - term interest rates need more explicit monetary policy signals to decline further [33][35][36]. Wait for the market trading focus to shift from growth to stagnation - The strong export in January - February was affected by the Spring Festival factor. Even after excluding this factor, the export growth rate was still at a relatively strong level of 13%. The strong export was related to the systematic increase in exports of industries such as integrated circuits, automobiles, and ships, as well as price factors. However, domestic demand was relatively weak, with low growth rates in fixed - asset investment and consumer retail [38][44][46]. - The February financial data showed that the new social financing was higher than the same period last year, but the new RMB credit decreased year - on - year. Although the year - on - year increase in corporate medium - and long - term loans brought expectations of economic activity recovery, it was also affected by the Spring Festival factor. The decline in non - bank loans and bill financing may reflect the regulatory authorities' reduced demand for credit impulse [49][54]. - If oil prices remain high, it may suppress the transmission of upstream price increases and squeeze the profits of downstream enterprises, and the impact on the overseas economy may also reduce the support of overseas demand for the domestic economy. The impact of the current supply shock may be greater than that in 2022 [60][61][62]. After the pre - emptive action, the certificate of deposit interest rate needs a decline in non - bank financing costs to cooperate - The news of stricter inter - bank current deposit self - regulation led to a significant decline in short - term interest rates. However, the decline in the certificate of deposit interest rate last week may have reflected the pre - emptive action of some non - bank institutions. The central level of the certificate of deposit interest rate needs to be compared with the actual non - bank financing cost [66]. - After the self - regulation becomes stricter, the average interest rate of non - bank inter - bank current deposits may be slightly higher than 1.4%, and the lower limit of the actual non - bank fund lending price may be around 1.45%. The central level of the 1 - year certificate of deposit interest rate can further decline only if the non - bank financing cost decreases, which can be observed through the change in the non - bank institution's lending volume [68]. How the bond market should respond to the early - arriving inflation shock - The supply - side inflation pressure won't change the overall mid - term trend of the bond market. For long - term interest rates to return to the downward range, the market needs to reach a consensus that inflation won't affect the monetary policy orientation. Currently, the bond market may remain in a volatile pattern, and it is recommended to maintain a neutral duration for further observation. There may be trading opportunities in the long - term after the continuous adjustment this week, but it is necessary to enter and exit quickly and stop profit in a timely manner. The risks of medium - short - term and credit bonds are relatively limited [77].

Investment Rating - The industry rating is "Outperform the Market" [7][73]. Core Insights - The report highlights that the Shanghai real estate market is experiencing a recovery, with the easing of purchase restrictions continuing to have a positive effect. Recent data shows that the number of second-hand homes sold in Shanghai reached 1,324 units in a single day, breaking the 1,300 mark for the first time in 315 days [3][12]. - The report emphasizes that the easing of monetary and fiscal policies in China, alongside the recent decline in interest rates, is expected to boost home buying intentions and stabilize the real estate market. The report also notes that the construction materials sector is likely to benefit from supply-side reforms and a potential turning point in the capacity cycle [3][5]. Summary by Sections Market Overview - The report discusses various government initiatives aimed at supporting major projects and improving living conditions, including increased loan limits for home purchases in several cities and financial incentives for housing upgrades [3][12]. - It mentions that the PPI has been in negative growth for 41 consecutive months, and there is a growing expectation for it to turn positive, which could benefit the construction materials sector [3][12]. High-Frequency Data - As of March 13, 2026, the average price of bulk P.O 42.5 cement in China is 323.4 CNY/ton, showing a 0.3% decrease from the previous week and a 19.4% decrease year-on-year [4][13]. - The average price of glass (5.00mm) is reported at 1,158.6 CNY/ton, reflecting a 2.0% increase from the previous week but a 9.7% decrease year-on-year [4][25]. Investment Recommendations - The report suggests focusing on three main investment lines: 1. High-quality companies benefiting from stock renovations, such as Weixing New Materials and Beixin Building Materials [5]. 2. Undervalued stocks with long-term alpha attributes, like Sankeshu and Dongfang Yuhong [5]. 3. Leading cyclical construction material companies that are bottoming out, including Huaxin Cement and Conch Cement [5].

Investment Rating - The report maintains a rating of "stronger than the market" for the defense and military industry [4]. Core Viewpoints - The commercial aerospace sector is identified as an emerging pillar industry, with policy dividends expected to continue to be released, transitioning from "clear positioning" to "implementation" [49][63]. - The report emphasizes three core areas for investment focus: 1) domestic rockets, 2) overseas S and T photovoltaic supply chains, and 3) satellite industry chains under technological transformation [49]. Summary by Sections Domestic Rockets - Three core logics are presented: 1) Macro: Strong launch capacity is a strategic high ground that major powers compete for [49]. 2) Meso: Objective gaps establish a logic for rocket quantity inflation, with a significant increase in rocket numbers expected within five years [49]. 3) Micro: The listing and financing of rocket companies will drive capacity expansion across the entire industry chain, achieving a dual boost in PE and EPS [49]. S (SpaceX)/T (Tesla) Supply Chain - The overseas commercial aerospace sector, represented by SpaceX, continues to progress rapidly in rocket launches, Starlink deployment, and photovoltaic construction [54]. - Notable companies to watch include: Lens Technology, Yujing Co., Maiwei Co., and Liancheng CNC [54]. Technological Changes in the Satellite Industry - The acceleration of China's satellite constellation plan is leading to new technological transformations, with developments in flexible solar sails, flexible gallium arsenide battery cells, perovskite batteries, laser communication, and low-cost commercial satellites [55]. - Suggested companies for investment include: Aerospace Electronics, Gobika, Shanghai Port, Junda Co., West Measurement Testing, Mingyang Smart Energy, and Guangwei Composite [55].

Investment Rating - The industry rating is "Outperform the Market," indicating that the overall return of the industry is expected to exceed the market benchmark index by more than 5% in the next 6 months [21]. Core Insights - The OFC and GTC conferences are expected to boost the demand for cloud and edge computing, with significant participation from over 700 optical communication companies and an anticipated attendance of more than 16,000 professionals [2][3]. - The introduction of the Feynman chip architecture by NVIDIA, which utilizes TSMC's 1.6nm process and incorporates optical communication technology, aims to reduce data center energy consumption and enhance AI inference capabilities [3]. - The acceleration of the edge-cloud flywheel is driven by the marketing of domestic AI large models and the promotion of Openclaw, leading to increased user scale and call frequency, which in turn boosts cloud computing demand [4]. Summary by Sections Cloud Computing - The demand for cloud computing is projected to grow due to the increased user base and call frequency driven by AI large models and Openclaw, creating a positive feedback loop that enhances model upgrades and cloud computing needs [4]. Edge AI - The market for edge AI products, such as AI glasses and intelligent robots, is expanding, with significant public interest in AI agents that can interact and perform tasks, indicating unmet market demand [4]. MicroLED Technology - MicroLED technology is highlighted for its energy efficiency in optical communication, with its co-packaged optical (CPO) solution showing a potential energy consumption reduction to about 5% of traditional copper cable solutions, benefiting from the growth of AI data centers [4]. - In the AI glasses sector, MicroLED is favored due to its high brightness, low power consumption, compact size, and long lifespan, suggesting a strong growth trajectory in line with the industry's expansion [5]. Investment Opportunities - Recommended companies for investment include those involved in MicroLED technology, domestic CPUs, edge AI, and satellite communication, indicating a broad range of potential investment opportunities across various segments of the industry [6].